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Will The Economy Crash When Government Checks Run Out?

Millions of Americans are getting by thanks to extended jobless benefits, but everything might change when the payments stop arriving later this year

A Florida woman holds her Federal food stamp card: A significant amount of personal income comes from the government, especially in Florida, Michigan and other states hit hardest by the recession. Photo: Joe Raedle/Getty ImagesSEE ALL 52 PHOTOS

Best Opinion: Wash. Monthly, Hot Air, FrumForum

Many American families are already struggling as the recovery falters, and for some the pain will soon get worse. Nearly $2 in every $10 Americans had in their pockets last year came from government subsidies such as jobless benefits, food stamps, and Social Security, reports The New York Times. And at the end of the year some of that money will dry up, as extended unemployment payments and other benefits worth an estimated $37 billion (as per Moody’s Analytics) expire. Will that kill what’s left of the recovery?

Yes, it could slam the economy: We’re draining money from the wallets of millions of Americans precisely when we should be pumping it in, says Steve Benen at Washington Monthly. Families are going to “start losing their buying power, which necessarily means less economic activity and a weaker overall economy.” It’s preventable — we could extend jobless aid, food stamps, and other hard-times programs, but “Republicans don’t want to.”“Anti-stimulative policies to intensify”.